Introduction of the LESS Steel Label in Germany: An Important Step for Steel Decarbonization, Mass Balancing Risks Efficiency

Publish date: June 11, 2024

The steel label presented by the Federal Ministry for Economic Affairs and Climate Action (BMWK) and the German Steel Federation (Wirtschaftsvereinigung Stahl) at the Hannover Fair marks an important step towards decarbonizing the steel industry. The Low Emission Steel Standard (LESS), which is aiming to be adopted internationally, categorizes steel products based on their greenhouse gas intensity and the proportion of scrap used in a six-stage scaling system.

Such a label is essential for establishing green lead markets and public procurement. By uniformly defining which products can be classified—and thus marketed—as green, the previously fragmented market dominated by various certificates is unified.

«”The uniform LESS label for green steel is a prerequisite for establishing green lead markets and green public procurement. Despite many good approaches, the permitted mass balancing poses a threat to the label’s effectiveness and risks greenwashing.”»

Jan-Justus Andreas

Director Bellona Deutschland

The proposal presents a solid foundation for this endeavor:

  • Bellona Duetschland welcomes the accounting through the physical attribution of measures at production facilities of a site.
  • It is crucial that certificates and offsetting are not recognized to incentivize actual steel decarbonization measures.
  • Especially for steel traded on the global market, the international perspective is decisive. The fact that LESS is designed to be internationally compatible is correct and important.
  • We welcome the ambition to introduce the certification system within this year. Transparency must be considered an integral part of the process. If successful, this could spur the decarbonization of the international steel industry.
  • We remain skeptical about mass balancing. While it is to be permitted only within a narrow and defined framework, this will determine to what extent the label promotes transformation efforts. Mass balancing that equates partially transformed products with fully transformed products risks delaying profound transformations – especially as long as there is no widespread demand for green steel. The possibility of combining “Business As Usual” with minimal partial efforts and equating this to fully decarbonized steel smells of greenwashing.

At the same time, there is significant time pressure to initiate profound transformations now to meet our climate goals and keep pace with international developments.